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U.S. Stocks Pare 2017 Gain as Dollar Weakens: Markets Wrap

(Bloomberg) -- U.S. stocks pared the best annual gain since 2013, slipping on the final market day in thin trading. The dollar’s slump continued as it heads for its worst year since 2005, pushing the euro above $1.20.

The S&P 500 Index fell to finish the year higher by 19 percent. The bulk of Friday’s losses came in the final 15 minutes of trading. Volume was 28 percent lower than the 30-day average as investors prepare for a three-day weekend. The Dow Jones Industrial Average fell from a record to trim its 2017 rise to 25 percent. Small caps rose only 13 percent in the year, while the Nasdaq Composite rose 29 percent. European equities edged lower but notched the fifth rise in the past six years.

The Bloomberg Dollar Index fell to the lowest level since Dec. 1, leaving it lower by 8.5 percent in 2017. The euro topped $1.20 for the first time since September as the common currency looks for its best annual gain in 14 years. The Bloomberg Commodity Index extended a record-breaking string of gains, as WTI crude held above $60 a barrel.

With little news to drive trading ahead of the New Year holidays, investors returned to themes familiar for the year -- a synchronous global expansion and go-slow approach toward monetary-stimulus withdrawal in major economies, which has been a winning recipe for equities and a loser for the greenback.

When investors return from the New Year holiday, they’ll have a week full of economic data to mull. Purchasing manager indexes and data on the services industries come before the monthly government jobs report and the minutes from the Federal Reserve’s last meeting.

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Stocks

The S&P 500 Index fell 0.5 percent at 4 p.m. in New York. The Dow lost 0.5 percent and the Nasdaq Composite Index dropped 0.7 percent.

The Stoxx Europe 600 Index fell 0.1 percent.

The MSCI Asia Pacific Index rose 0.4 percent. The MSCI Emerging Markets Index headed for a third straight weekly gain and its highest close since 2011.

Japan’s Topix Index fell 0.1 percent as of the close in Tokyo, still near its highest level since 1991.

Currencies

The Bloomberg Dollar Spot Index decreased 0.4 percent to the lowest in more than three months.

The euro climbed 0.4 percent to $1.20, the strongest in more than 14 weeks.

The British pound gained 0.6 percent to $1.3525, hitting the strongest in 14 weeks.

The Japanese yen gained 0.3 percent to 112.56 per dollar, the strongest in more than a week.

Bonds

The yield on 10-year Treasuries fell three basis points to 2.41 percent.

Germany’s 10-year yield climbed two basis points to 0.44 percent, the highest in more than two months.

Britain’s 10-year yield declined one basis point to 1.199 percent.

Commodities

West Texas Intermediate crude advanced 0.4 percent to $60.05 a barrel, the highest in more than two years.

Gold climbed 0.4 percent to $1,299.90 an ounce, hitting the highest in 11 weeks with its eighth consecutive advance.

Copper dipped 0.8 percent to $3.28 a pound, the first retreat in more than three weeks.

The Bloomberg Commodity Index gained 0.1 percent to 87.79, hitting the highest in more than seven weeks with its 12th straight advance.